Why the Yilishen ant-farming scandal was the perfect China story

Imagethief recently found himself huddled in a wintry hutong courtyard in conversation with two longtime Beijing-based foreign correspondents. During this discussion we came to the conclusion that the recent Yilishen ant-farming scandal is more or less the perfect China story. It brings together at a stroke all of the elements of the modern Chinese story. And surreal story it is.

If you’re not familiar with this incident (and you really should be), you can go read Mark O’Neill’s comprehensive article on Asia Sentinel, or any of several other stories which, collectively, have generated something of a bumper crop in pun headlines.

But if you’re pressed for time here is a synopsis: The Yilishen Tianxi Group, a Shenyang-based company, was manufacturing an allegedly aphrodisiac tonic made from ants, which are widely believed to have medicinal properties in traditional Chinese medicine. But rather than wrangle ants itself (nothing feels as good as bringing in a herd, I hear) Yilishen’s scheme was to sell would-be ant farming “investors” boxes of special medicinal ants at RMB10,000 for three. Along with the boxes came a promise that once the ants matured (read: died), about 14 months later, Yilishen would buy them back for RMB13,250. That’s a 30% guaranteed gain over 14 months which, while not quite pre-meltdown A-shares, kicks the ass of many a hedge fund.

Except that the Yilishen ant trade was a pyramid scheme, and it went spectacularly bust, leaving tens of thousands of Dongbei punters short RMB10,000 and long three boxes of worthless ants. Not exactly Warren Buffet. Outraged ant farmers from across Liaoning province rioted in Shenyang, the government imposed a news blackout and the wujingarmed police headed north to diligently maintain a harmonious sociey, which is hard under these circumstances.

You simply could not make it up. Ten Hollywood screenwriters locked in a closet with a kilo of blow, a brick of twenty dollar bills, your sister and a cigar-smoking chimpanzee in boxer shorts wouldn’t come up with this. Even if they weren’t on strike. Only China comes up with this. And not only does China alone come up with this, but the story also nicely draws together all the threads of the modern, Chinese narrative and ties them into a pretty bow. Just look at what this story offers:

Social Issues
The Dongbei is China’s rustbelt; a swathe of deep-frozen, fading industrial towns that were once the showpieces of Maoist industrial collectivization. While the cosmopolitan port city of Dalian has blossomed in China’s post-reform economy, much of the region has struggled to keep up with the go-go development of the two Deltas and the capital. Hence the “振兴东北老工业基地” (Revitalize Northeastern Industrial Base) campaign and those tragic stories of families’ life savings being sunk into ants and ant-aunties pooling the funds of their neighborhood taiqi group to go in on a few lucky boxes. Apparently about a million people bought into the ant-dream. Could ant farming be symbolic of the economic desperation of an entire region? Or might it just be a punt? Who cares, because there was also…

About 98 percent of Chinese medicines are aphrodisiacs. The average Chinese pharmacy is about half aphrodisiacs and half prophylactics with one or two boxes of nasty, herbal flu medicine just in case. The reason why rhinoceros and tigers have been hunted to near extinction is to make Chinese aphrodisiacs. Imagethief himself once appeared in a television commercial for a Chinese aphrodisiac. They’re that ubiquitous. You’d think the Chinese had never heard of p0rn. And what goes better with sex than…

Yilishen Group turned out to be well connected throughout Liaoning provincial circles. This had apparently helped fuel its rise in the province, but also motivated embarrassed local officials to make the whole situation go away as soon as possible. That left bereft antherds with the usual channels of legal recourse available to the small-time victim under provincial Chinese jurisprudence: none. Therefore, the only alternative was…

Mass incidents
Ten thousand ant farmers rioted in a provincial capital. Imagethief asks you: What country other than China could cough up that lede? Mass incidents are the sine qua non of the modern Chinese scandal. In a rare and rapidly regretted moment of candor the authorities once admitted that there were 74,000 of them in 2004, up 28% on the year before (not quite as much as the pre-collapse return on ants, but still pretty good). No pressing social issue is complete without one. Chemical plant going up on your rice paddies? Shanty being expropriated for Olympic development? Local manufacturers turning your once limpid lake into a festering pool of PCBs and heavy metals? Two words: Mass incident! However, this may be the first one caused by…

Ants? Yes, Alice, ants. Imagethief tries to maintain a culturally sensitive respect for traditional Chinese medicine. Indeed, when I pinched a nerve in my shoulder two years ago I took traditional Chinese medicine and had a round of cupping (note to Americans: it’s not as dirty as it sounds). It worked, I believe, only because the medicine was so nauseatingly foul and the cupping so excruciatingly painful that I willed myself to recover so that I wouldn’t have to endure a second course of treatment.

But, really, an ant-based sex tonic? Hasn’t this ground been trodden before? The image of so many fevered, Chinese investors hunched over their RMB10,000 boxes of magical ants is both funny and desperately tragic. Unfortunately it was all a bit too much embarrassment for the Chinese authorities, so naturally…

The whole thing was harmonized
Mainstream coverage evaporated and the search term “Yilishen” went down the Chinese Internet memory hole once the authorities decided they’d had enough. Previously uploaded videos and blog posts dropped gnats in a frost. China’s pre-eminent citizen journalist, Zuola, a veteran of the Chongqing nailhouse and Xiamen PX stories, wasescorted out of Liaoning. To add insult to injury he was apparently made to pay for his own plane ticket. No word on whether he had to pay for the tickets of the goons who escorted him.

Imagethief has a friend from Shenyang who complained bitterly about the suppressed media coverage. “It’s not like we don’t all already know about it,” she said, admitting that her own parents had been among Yilishen’s legion of ant farmers. “It’s so…” she considered the English word she wanted to use…”insulting.”

Meanwhile, many of the Yilishen riot videos harmonized from Chinese video sharing sites have found their way onto YouTube. You can’t keep a good story (or a bitter ant tonic) down.

And that’s all there is to it
Imagethief in no way wishes to minimize the plight of Yilishen’s investors. RMB10,000 is a lot of money by any standards. My friend from Shenyang also explained that her parents neighbors had invested RMB60,000, and they knew people who had invested a whopping RMB1,000,000. Imagethief also doesn’t think that investors in Yilishen’s ants were stupid. Scams and pyramid schemes thrive everywhere. Successful ones are cleverly engineered to appealed to the society in which they operate. Yilishen was a well known brand that had been in business for several years and had a good reputation. Traditional remedies are still widely used and respected in China, and ants are part of the pharmacopoeia. Virility tonics are popular. Combine all of that with a cultural affinity for gambling and a get-rich-now zeitgeist and you have a China story for the times.

For sheer swoop and color it sure beats the rise and fall of China’s other great pyramid scheme, A-shares.

Eat me.

Eat me.


  • Photo copyright Alex Wild, from his superb ant and insect photography gallery.
  • Imagethief realizes he is a bit behind the story. This post has been in drafting for ten days. Darn those day-jobs.
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